THE TWO ROUTES OF INNOVATION – IDI VRS VDI

INTRODUCTION: THE STORY OF ALICE IN WONDERLAND

In the famous story of Alice in Wonderland, Alice goes along a path that reaches a tree and divides into three paths, on the tree is a cat, which Alice asks which way to take? this was the famous answer that Alice received from the cat, when she asked him which way she should go:

Alicia: Could you tell me, please, which way should I go? Cat: That depends on where you want to go. Alicia: The truth is that I don't care too much where Cat: Then it doesn't matter much which way you take Cat: If you walk enough you will get somewhere

This is the famous story of Alice in Wonderland that exemplifies what happens to people and organizations, that if they do not know where they want to go, no matter the path they take, surely if they walk enough they will reach some destination, which perhaps has no importance or meaning.

This is the dilemma faced by innovators and companies seeking to innovate on a daily basis. And in innovation there are basically two paths to follow or innovates driven by ideas (idea drive Innovation -IDI) or innovas driven by value (value drive Innovation -VDI), a difference that we will address in this article.

Innovation driven by ideas - IDI.

An executive in the middle of a hot shower comes up with a great idea for the next innovation project, a company organizes a hackthon to collect ideas that will solve a problem they currently have, another company launches a challenge on a crowdsourcing platform to collect hundreds of ideas, an innovation team uses the Design Thinking methodology to generate ideas to the needs of its clients or simply an executive organizes a brainstorm to improve your area, among many more efforts called "Calls to Action (call

However, these processes of "Idea Drive Innovation" (IDI), are one of the biggest mistakes and blurs of innovation, according to Anthony W. Ulwick (Jobs to be done - Theory to Practices - Idea Bite Press 2017) companies that employ these ideation approaches based on IDI, disappoint for two reasons: (1) Managers are often paralyzed by the number of ideas that are generated, as they lack the ability to properly evaluate and prioritize them. As a result, they are inundated with hundreds of ideas and have no way of effectively determining which ones are best, nor what impact and value to expect from them; and (2) only 17% of new product ideas that are developed succeed in the marketplace, making ideation a highly inefficient and broken process.

Figure 1 shows this process. At the beginning innovators have an idea that solves a problem or addresses an opportunity, this idea has to go through processes of refinement, selection, enrichment, propose, prototype and validate, and then develop the idea and deploy in the market.

Figure 1 – Idea-driven innovation process

In any innovation, at the beginning there is a series of successive interactions and learnings before development and deployment to the market, however, in the case of innovation driven by IDI ideas, in the development phase and mainly in the deployment phase, market testing and evaluation of the value created to the customer as the impact to innovation there are a series of successive interactions and learnings, that can end up iterating many cycles in defining the market, the jobs the customer seeks, the value he expects, the impact the organization seeks in innovation and in the value proposition of the product, all at the same time, causing an endless, recursive loop of pivots, agitation and frustration, which in the end make only 17% of new product ideas go to market, They are successful in the market, not counting the hundreds of projects that no longer come to market.

Value-driven innovation - VDI.

Value Drive Innovation (VDI), is based on starting innovation with the end in mind, that is, first having the clarity of the strategic intentions of the organization, the value expected by the customer and the impact that the organization expects, which give the orientation (north) for the ideation processes, for which you must first have the clarity of the organizational context, the disruptive trends of the sector, the new customer requirements, the unserved markets, the innovation ecosystems, the potential disruptors of the industry, among others, that is, as indicated by one of the eight principles of innovation (ISO 56002, clause 4), called focus on realizing value : "The purpose of innovation is to generate value, whether financial or non-financial, through the identification, understanding and satisfaction of the needs and expectations of stakeholders."

This continuous assurance of the fulfillment of strategic intentions and the value expected by the client, allows to ensure the creation of value, through: (1) instead of generating hundreds of questionable ideas, define solutions that explicitly address the most unattended needs of your customers and the strategic intentions of innovation; (2) only innovations that generate customer value, strategic competitive advantage, growth and impact on results are considered; (3) the innovation process from the beginning is oriented to results, and value creation; and (4) results in the conceptualization of feature sets, concepts, solutions, and business models that are sure to deliver significant value to customers and stakeholders; and (5) using innovation tools.

According to Anthony W. Ulwick, in his book Jobs to be done - Theory to Practices - Idea Bite Press 2017, he indicates that the systemic approach to VDI innovation has a success rate of 86%. This improvement between VDI value-based systemic innovation versus an IDI idea-based innovation process, which is between 86% success rate versus 17%, i.e. a five-fold improvement, represents a good example to understand the difference in efficiency and effectiveness of managing innovation with a systemic approach, represents one of the critical success factors (FCEs) of innovation management.

Figure 2 shows this process. As we mentioned earlier, at the beginning innovators have an idea that solves a problem or addresses an opportunity, this idea has to go through processes of refinement, selection, enrichment, propose, prototype and validate, and then develop the idea and deploy in the market.

Figure 2 – Value-driven innovation process

In any innovation, at the beginning there is a series of successive interactions and learnings before development and deployment to the market, however, in the case of innovation driven by VDI value, in the development phase and mainly in the deployment phase, as innovation begins with the understanding of the value expected by the different stakeholders, innovation is carried out in a very fluid way, impacting both the value to the customer and the market, as well as the results expected by the organization, which according to Anthony W. Ulwick, has a success rate of 86%, that is, an improvement of five times when compared to the IDI innovation process.

Here we see present, alive and kicking, the Alice in Wonderland effect: "if you don't know where you're going, it doesn't matter much which way you go." We do not doubt that companies and entrepreneurs that follow the IDI method, do so with passion, effort, motivation and discipline, however, as the cat replied to Alicia, "you walk enough you will get somewhere", a place whose impact is five times less than value-driven innovation.

Some differences between IDI vs ODI are as follows:

Conclusion:

Every innovator works with passion, effort, motivation and discipline, much of the difference in success or failure, depends on the path they take, it is proven that a value-based innovation is less risky, reduces the distance between those expected by customers, the market and the organization, takes advantage of the knowledge that the analysis of the context provides and finally impacts five times more on the success rate of innovation.

As they say in my country "ignorance is daring" and that happens with those entrepreneurs and innovators who do not understand the dynamics of innovation management, before innovating.

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ABOUT THE AUTHOR:

Alvaro Reynoso is an Industrial Engineer, holds a postgraduate degree in Total Productivity Management from the University of Miami and a Master's Degree in Business Administration from EAE Barcelona. He is a certified evaluator of the Malcolm Baldrige Performance Excellence Program Quality Award of the United States of America and the Ibero-American Model in Management Excellence - Fundibeq. He is certified in Orange Belt in Innovation Magement System ISO 56002, in CPI Certified Professional innovator and in Black Belt in Lead Auditor in Innovation Management System ISO 56002, by the International Association of Innovations Professionals (IAOIP), where he is currently Director of the Latin American Chapter and Member of the World Board. He is currently the President of the Guatemala Innovation Team working on the design of the new ISO 56000 standard called Mirror Committee GT- TC279 – IMS ISO 56000.es director of PCAinnovation, a company focused on consulting and information systems for the implementation of ISO 56002 – Innovation Management System, supporting companies and institutions throughout Latin America, He was also the winner of the Guatemalan National Innovation Award 2020 for applications in augmented and mixed reality in the maintenance and training process in the industry. He is a facilitator in different certification processes in GIOB - Innovation Management at the Orange Belt level under ISO 56002 in Ecuador, Peru, Guatemala, Mexico and other countries in the region.

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